Research Korner: Consumers Purchasing Behavior

Customer Behavior

Marketing   Customer Behavior               Customer behavior differs from person to person. Every person has different preferences. The most visible is that they differ in their demographic and not only that but also by human nature also, customers can be spontaneous, unpredictable, and selfish. By human nature, customers would want what would best suit their preferences.               As according to  (1954), by human nature, man is motivated to satisfy his unsatisfied needs. Maslow formulated a model that has five fundamental needs and their hierarchical nature. The lower the need in the more fundamental is the need. The five needs include physiological needs, safety needs, belonging needs, esteem needs and the self-actualization needs.             Physiological needs are the need for surviving like as air, warmth, food, sleep, stimulation and activity. This need concerns biological balance and stable equilibrium. These needs can be very strong because if deprived over time, the person will die. Safety needs are about putting a roof over our heads and keeping us from harm such as living in a safe area away from threats. Belonging needs such as the love of family and friends. Esteem needs such as healthy pride, self-respect, and respect from others.  Self-actualization are to 'become what we are capable of becoming', which would our greatest achievement such as purpose, personal growth and realization of potentials. This is the point where people become fully functional, acting purely on their own volition and having a healthy personality ( 1998). Figure 1. Maslow Hierarchy of Needs             In business, customer and management expectation must be closely monitored to maintain the balance between the relationships. If there is a need of change, the management should be willing to adopt the need of change especially in service-oriented businesses. Most importantly, customers seek on to good service. The management should also recognize the needs of the customers. Through recognition, there would be a more effective delivery of goods and services. The need of change would also be known.             As we know the marketplace is characterized by continuous changes in market composition, business practices and structure. According to the Consumer Psychology in Behavioral perspective, "The most widely-accepted and influential models of consumer behavior derive in large part from cognitive psychology. As a result, consumer choice is usually understood as a problem-solving and decision-making sequence of activities, the outcome of which is determined principally by the buyer's intellectual functioning and rational, goal-directed processing of information." (1990). Customer behavior consists of different attributes and preferences that should be predicted by marketing managers. Understanding customer behavior is important in developing of marketing strategies especially in pricing, product design, segmentation, targeting, positioning and promotion.             Even in a simple purchase, customers unconsciously go through a series of buying decision process before a customer can decide on buying the product or the service or not.             An example is when I bought Colgate toothpaste. Unconsciously, I had gone through the decision making process.   Roles in the Buying Process                  In purchasing, there are different people which can influence the decision making process. There are roles that each individual play in making the decision of buying the product or service. These would include the initiator, the influencer, the decider, the buyer and the end user of the product (). You may be two or more of the following roles in the decision making.             The initiator usually is the first to suggest the purchase. For example, when you are hungry and you suggest that to purchase food you become the initiator.             The influencer is the one in the group that has the knowledge and personal authority who influence the outcome. For example, you know about somewhere to eat, you become the influencer because you have the knowledge.             The decider decides whether to buy, what to buy, where and how. In the family, usually the decider in purchasing is the parents. They have the money thus they have the power to decide.             The buyer makes the purchase. After deciding on whether to buy, what, where, and how, you can now purchase/ buy.             The end user of the product is the one actually using or consuming the product.             In the case of my purchase of toothpaste, I play the role as the initiator as when I feel the need of toothpaste. My parents were my influencer as I have observed that they have been using particular brand which is Colgate. Eventually, I was the one who decides to buy so I was also the decider. After deciding, I became the buyer and the end user.   Decision Making Process             Consumer decision making process and behavior relates to four different views ( 2004). These are economic view, passive view, emotional view and cognitive view.             In the economic view, consumers are primarily facing imperfect competition and they are always expected to make rational decision on the basis of assumptions that they are aware of all product alternatives, they can rank benefits and limitation of each alternative and are able to identify one best alternative (2004).               The second is Passive View which is absolutely opposite to economic view and suggests that consumers are irrational and impulsive as they are submissive to self-centered interests of marketers and got influenced by marketing tools (2004).             Similarly, the third which is Emotional View is related to perceive consumer’s decision making based on their emotional association or feeling about some products and services (2004).                         Fourth which is the most acknowledged and arguable view is Cognitive View where consumers are considered as thinking problem solver which are receptive as well as actively searching for the products and services that can fulfill their need. Consumer’s behavior under this view is based on information seeking and processing attributes usually directed by a goal (2004)             In cognitive view, as asserted by (2004), there are broader stages of a consumer’s decision making process. This includes problem identification, information search, evaluation of alternatives, outlet selection and purchase, and post-purchase action.   Figure 2. Decision Making Process   Problem Recognition             By the time I perceive that my toothpaste tube is already empty, that was the time when problem has been recognized.             Problem Recognition is perceiving a difference between a person’s ideal and actual situations. It is also defined as the difference between the desired state and the actual condition.  It is simply perceiving a need or being aware of a need. It can also be stimulated through seen advertisement on new ideas or styles. For example you seen in the commercial a new style of jeans, this would stimulate you to perceive a need to have those new jeans.   Information Search             Information search involves internal and external search. Internal search is scanning one’s memory to recall previous experiences with goods and services and also the brand. External search includes personal sources (family, friends, neighbors, etc.), commercial sources (advertising, salespeople, retailers, dealers, packaging, point-of-sale displays), public sources (newspapers, radio, television, consumer organizations, specialist magazines), and experiential sources (handling, examining, using the product).             In the case of buying the toothpaste, information was acquired through personal sources which was the parents that influence me of buying the particular brand and also through previous experiences of the product. It also involves experiential sources by actually using the product. Evaluation of Alternatives             From the information search, the customer has already clarified the problem. The criteria to be use for the purchase is already known by the consumer, brand names had already been yield that might meet the criteria, and the consumer has already developed a value perception.             In evaluation stage, the customer must choose between the alternative brands, products and services and even the prices. In this stage, criteria for evaluation are in need to be established that should features the buyer wants or does not want. Then rank/weight alternatives or resume search.             In the case of buying the toothpaste, evaluation is not already applicable in the situation because I already have the perception of buying the brand Colgate because I have already been using this for a while and I have been used to using the brand. Outlet Selection and Purchase             When you have already evaluated all the aspects that you want from the product or service you want to buy now is the time to decide if you would purchase or not.             But before purchasing, consider also when to buy and from whom to buy. When to buy can be influenced by store atmosphere, time pressure, a sale, and pleasantness of shopping experience. From whom to buy depends on some considerations such as terms of sale, past experience of buying from the seller and return policy (www-rohan.sdsu.edu).             Purchasing of my toothpaste does not really consider where to buy or when to buy because the need of toothpaste is immediate and it does not need really a longer time to choose from where or from whom.              Post –purchase evaluation             The final stage is the post-purchase evaluation of the decision. It is common for customers to experience concerns after making a purchase decision. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time. But if a customer would be satisfied with the product or services bought, the customer would likely to buy the product again.             In my case, the toothpaste that I have bought has satisfied me so I have bought he product again. Criteria of Choice             Criteria are used when you are evaluating on the product you would like to buy. These criteria will be your guide in choosing the right product or service or brand that would satisfy your needs or want.             In choosing the toothpaste to buy, the criteria that to used are cleaning ability. Toothpaste role is cleaning the teeth thus the cleaning ability is the most important in toothpaste. The toothpaste should have the high amount of baking soda because this ingredient is abrasive that helps in cleaning the teeth. It should also have the capability of fighting plaque. Right amount of fluoride is another consideration. Fluoride is found in toothpaste that helps in fighting cavities. Another criteria that should also be considered is the ability of the toothpaste to prevent tartar. Moreover, the toothpaste should have the capability to prevent gum disease and reduce plaque.             For personal preference, the taste of the toothpaste was also considered and feels best. Today we can choose toothpaste in gel or paste. There are also flavors in toothpaste like wintergreen, spearmint, eucalyptus and others.             Quality of the product is the most important criteria when you purchase a product. It is the effect in you that matters. It’s the satisfaction of the consumer that can drive out to repeated purchase of the product.             Availability also in the market matters. When the product is not available, usually customer would switch to alternative brands that are more accessible and easy to seek.  Like for example, you are using that particular brand but when you go to the grocery store you will find that there are no stocks. Most likely you should another brand that still has the same effect.              Suitability of the product also is to be considered. The toothpaste that should be bought should suit the dental problem of the customer. For example you have a tartar problem you should choose a brand of toothpaste that have tartar control.             Implications of the toothpaste should be considered. The amount of each ingredient should suit what your preferences or what your teeth needs.             The price also of the product is to be considered especially on the price conscious customers. In choosing the suitable toothpaste, consideration in the price is also important.   Change in the Decision Making Process             Buying decision making has five processes. These include problem recognition, information search, evaluation of alternatives, purchase and finally post purchase evaluation. But in some aspects these process also change with some products or services.             In customer with very specific brand to purchase, information search about the product and evaluation will not be in the process of purchasing anymore. Customer knew already the brand he wants so no need to evaluate the product.             Change in decision making process also happens when the customer has already purchase the product and is satisfy with the product thus when problem is recognized purchase will go immediately after purchase.               For example with the toothpaste which has the Colgate brand. Because the family has been used with the brand and has been satisfied, it is purchased even without thinking twice.

Customer Behavior

Marketing Customer Behavior Customer behavior differs from person to person. Every person has different preference...

CONSUMER BEHAVIOR WRITTEN REPORT

To travel or not to travel?: a look at the consumer behaviour in travel and tourism     Introduction   “A hundred miles of travel is better than a thousand miles of scroll.”                                                                                         -Confucius Experience is a great teacher. A single place, person and/or event can teach an individual more than what he can learn from the four corners of a classroom.  Theories can be discussed; it is easy to say and explain what ought to be done and how to do it but the real battle begins once the student or even the teacher steps into the real world.  The theories and practices will be put to the test and, more often than not, it is easier said than done.   People travel to experience different cultures, interact with different kinds of people and taste different cuisines first hand.  They travel because they have the urge to set forth and discover for themselves the beauty of this planet they call home.  Pictures and images from postcards, magazines brochures and television advertisements fall short of providing fulfilment that actually being in the place can surpass.   According to (2003), mass tourism is relatively new creation.  World War II gave the average person the opportunity to travel. The deployment of soldiers to the front lines of battle around the world gave ordinary individuals the opportunity to see their neighbouring countries or people apart from their own.  However, given the circumstances at that time they could not really get a hold of what the place or its people have to offer.   After the war and the because of capitalism, travelling became more convenient and less expensive. The accessibility of travelling changed the mindset of most westerners; they even deem travelling as a right and not a privilege. In addition, by the end of the nineteenth century travelling ceased to be an activity for the wealthy alone (, 2001).  Because of this, businesses started investing in the development of competent, safer and faster way to travel. Territories were kept so that countries can benefit from the inflow of capital being poured into the tourism industry.  Those in the hotel industry are running in the race to acquire the prime lots in exotic destinations.   Experience is a great teacher. A single place, person and/or event can teach an individual more than what he can learn from the four corners of a classroom.  Theories can be discussed; it is easy to say and explain what ought to be done and how to do it but the real battle begins once the student or even the teacher steps into the real world.  The theories and practices will be put to the test and, more often than not, it is easier said than done.   People travel to experience different cultures, interact with different kinds of people and taste different cuisines first hand.  They travel because they have the urge to set forth and discover for themselves the beauty of this planet they call home.  Pictures and images from postcards, magazines brochures and television advertisements fall short of providing fulfilment that actually being in the place can surpass.   Tourism is an opportunity for people to play ( 1989). Tourism in its true sense represents a human behaviour that  (1962) calls “Human exploratory behaviour.”  This human behaviour includes expressive culture like the arts, sports and folklore.               According to (1999), the World Travel and tourism council estimated that tourists are spending 3.6 trillion dollars on goods and services directly or indirectly which is about 10.6 percent of the 1996 gross global product.  In addition, because of the number of people availing tourism services it has provided one out of ten jobs worldwide or around 25.5 million people employed in tourism related companies.   In the United States alone, the tourism industry was able to contribute at least $95,000,000,000 to the country’s economy and was able to employ about 18,000,000 Americans with a combined salary of more than $160,000,000,000.               This means that more people depend on tourism for livelihood and that the decision of people to travel ultimately affects the source of income of others. As such, it is important to determine the deciding factors that affect consumer behaviour in relation to travel and tourism.               The following sections of the paper will be tackling influence factors and how they are able to contribute to the decision-making process of a tourist. Factors and influences to be discussed are demographics, motivation, learning, group, family, culture and subculture. A specific example will be given to illustrate how these influences and factors actually affected the decision making process. For this paper, the case of             will be stated as an example.   Demographic Influences   Joanne is a 28-year-old employee from Melbourne. She is married with no kids. Her husband also works for the same company. Joanne is earning $650 AUD a week, while her husband is earning $450. Their combined salary is 4400 a month. This household income is allocated for utility bills, mortgage, food and transportation allowances among other expenses.   Their housing expenses is composed of $12,144 for mortgage, $700 for water, $350 for gas, $1000 for electricity, $335 for telephone and $350 for contents insurance. The expenses are shown on a per annum basis. These expenses run at $309 per week. On top of these, they spend around $470 for food, car and sports and recreation expenses. Therefore, their total household expenses for a week are $779.   This leaves them with $321 dollars. However, out of this only 200 dollars get to make it to their savings account. The other $121 goes to clothing, eating out and other luxury expenses.  Since November of last year, Joanne and her husband have been planning on going on vacation. For the last four months, they were able to save $800. Aside from their monthly saving of $200, they were able to add $1000 from their annual Christmas bonus making their total saving $1800. Based on Joanne’s perception, this amount of money is enough to allow them to travel locally. However, Joanne’s decision to travel was not solely due to the trust that their savings will allow them to do so. Other factors led to the Wilson’s decision to take their well-earned vacation.    For example, the couple do not have any children to worry about. They are practically free to go on vacation and experience days of relaxation away form the hassles of their works. This, according to Joanne, played a crucial role in their decision to go on vacation. In addition, their work actually allows them to go on vacation since they both have 3 weeks of unused vacation leaves. This means that there were no time restrictions to pull them away from taking a break. Age is also a factor that influenced the decision of the couple to travel. They are both in their late twenties. This means that they are old enough to savour the experiences of travelling. On the other hand, they are not that old to mind the physical activities associated with travelling.               Aside from income, marital status and age, gender also plays a great role in consumer behaviour. According to     (1981a), individuals acquire their attitudes, traits and behaviours dependable on their gender identity. This means that people’s gender identity serve as their organizing principles and as such, they process information based on their gender identity. Nevertheless, this does not mean that it is solely based on the person being a male or a female. This is the case since gender identity pertains to the psychological sex of the individual ( 1984). Therefore, some males can be more feminine as some females while some females can be more masculine than some males.               In the case of Joanne and her husband’s decision to go on vacation, Joanne is leaning more towards the masculine females in comparison to her husband’s masculinity. This may be brought about by the fact that Joanne is earning more than her husband is. However, Joanne explained that her husband allows her to do the decision making when it comes to household related decisions. This includes planning trips for the two of them. She further explained that her husband is not a good planner and is not keen with budgeting that is why most of the purchasing power goes to her.   Nevertheless, her husband provides insight on items that will affect the two of them. The masculinity of Joanne in the household contributed to the decision to go on vacation since it is a determining factor in the decision making power of homemakers ( 1977). The claim that Joanne’s being a masculine female contributed to the decision to go on vacation was strengthen by         ’s claim that gender identity is a strong factor in the development of attitudes towards leisure activities (1977).   Motivation               Aside form the demographic factors, motivation also played a factor in the decision of Joanne to go on a vacation with her husband. There are several theories on consumer motivation. These consumer motivation theories offer different perspectives that will allow marketers to understand the motivations of consumers. In this section of the paper, six consumer motivation theories will be presented. At the end of this section, the applicable consumer motivation theory in the case of Joanne  will be identified.               The first consumer motivation theory is hard-core behavioural perspective (2006). This perspective is based on conditionings that are operant and classical. This suggests that consumers learn through their own experiences.  Hard core behaviourists believe that it is important to reward good behaviour to the most possible extent. To them advertising is not of importance.               The second consumer motivation theory is Social Learning perspective. In contrast to hard-core behavioural perspective, social learning perspective leaves room for vicarious learning. This perspective implies that consumers learn by observing the positive or negative consequences of other people’s behaviour ( 2006). The experiences of friends or family members play a significant role in social learning perspective as well as advertising. This means that social learning theorists believe that consumers are influenced by what they see on television, hear on the radio, or read in newsprints. However, the strength of learning must be more than the strength of own experiences.               The third consumer motivation theory is the learning approach. This theory is geared more towards the idea of the thinking consumer rather than attributing consumerism to behaviours (2006). It is emphasized in this theory that consumers reason with themselves regarding the consequences of their decision to purchase or otherwise. Therefore, in the learning theory, culture holds a significant place since assumptions are culturally ingrained.               Biological approach pertains to the role that genetics paly in the consumption of products. This theory is more applicable to foods and beverages. This is the case since biological approach states that genetics dictates what a consumer wants to eat and therefore what the consumer will most likely purchase of grocery shelves. However, this theory is misleading. This si the case since it displaces the role that culture plays in the determination of food choices ( 1998). It is the case that some culture have food preferences that also affect their consumer behaviours as individuals.               The next theory is Rational Expectation. It pertains to the economic way of looking at the world. This means that rationalists believe that people think rationally and have the perfect information ( 2006). However, it is often the case that their assumptions are unrealistic. The last consumer motivation theory is the psychoanalytic perspective.  This perspective looks upon the theories of Sigmund Freud. In addition, it looks at how sex and early childhood experiences unconsciously affect decisions latter in life (, 1998).                In case of Joann’s decision to take a vacation with his husband can be attributed to the psychoanalytic factor. This is the case since the decision was made partly because the location that visited was actually Joanne’s hometown.   Learning               Unlike other tourists, domestic or international, Joanne did not spend long hours surfing the internet to look for the perfect vacation spot. There was also no need to pick-up brochures and other information rich reading materials to help her in making the decision. This is the case since Joanne is familiar with her destination of choice. It was stated earlier that Joanne and her husband made their way to Joanne’s hometown for their vacation.   This means that Joanne will not be needing roadmaps to point them towards their destination. She does not need travel guides to tell her all abut the wonderful sights that they can visit. All of this information is recorded on the mind from her childhood years. She grew up in that town and spent quite long hour trekking and sight seeing. In addition, she did not need to look for accommodations since they would be staying at her parents’ house. In a way, Joanne’s vacation also doubled as her chance to reunite with friends and relatives that she was not able to visit for a long time.               It may seem that Joanne did not go through the learning process that affected her decision to go on vacation. However, she did go through the learning. The process that she went through is actually lengthier than the normal traveller’s learning process about a vacation destination. Her learning process started when she was just a kid. The memories of hiking with her father remind in her mind well into adulthood. When her father died shortly after she got married, she got afraid of immediately going back to her hometown.  However, the memories of happy times in the town were she grew up causes her bittersweet feeling, although, the sweetness often overcomes the bitterness. When Joanne would hear hiking, she would immediately associate with her hometown and get excited.               Joanne’s reaction can be explained by classical conditioning.       formulated classical conditioning ( 2002). Classical conditioning has four parts – unconditioned stimulus, unconditioned response, conditioned stimulus and conditioned response. To explain classical conditioning the famous experiment of        will be cited.   When      was formulating classical conditioning, he experimented with dogs and food. When dogs are being they salivate. At this stage, food is the unconditioned stimulus, while salivation is the unconditioned response.       then started pairing the feeding process with the sound of a bell. Initially, the sound is neutral since it does not have the capacity to elicit the unconditioned response. However, as a pairing continues the sounds takes the form of the conditioned stimulus. Since salivating occurs when the bell was rang, salivation is now considered as the conditioned response (as cited in , 2002).               The classical conditioning learning theory by       suggests that consumers can be taught to buy certain products.  All that needs to be done is to associate a product with a certain reaction. In the case of Joanne, the thought of hiking elicited the thought of going back to her hometown, which resulted to her feeling happy. Thus, Joanne learned that hiking is associated with a feeling of happiness. Clearly, this kind of thinking allowed Joanne to make the decision easily.   Group and Family Influences               Even though, Joanne has not been to her hometown for more than three years, she is still has an open line of communication with her friends and relative back at home. Internet and mobile phones are her tools in contacting her mom and siblings as well as other relatives and friends. They constantly share pictures over email. Long hours are also spent chatting or place VOIP calls. It is evident that despite being away from her family and friends, they still play a crucial role in her life.               In analysing the influence of family and friends in Joanne’s decision to take a vacation, it is important to determine the kinds of groups there are as well as the various degrees of influences. A framework that can be used in analysing the influence of family and friends on a consumer is the presence of reference groups ( 2002). There are three kinds of groups being used to influence the decision making process of consumers.   First is the aspirational reference group. This group is composed of people or organization that a person would like to compare his or herself to. For example, athletes are being used to endorse products ranging from cereal to shoes. This is being done to convey the message that if consumers purchase and use the products being endorsed, there is chance that they will be associated with the endorser themselves ( 2002).   The second reference group is Associative. This reference group is like the aspirational group, although this is more realistic. The third reference group is dissociative. This group is composed of people or organizations that people would not like to become. For example, younger people could not want to be associated with older people like their parents because they are thought of as uncool.               In the case of degree of influence, there are two degrees namely primary and secondary. As the name suggests, primary influences are more influence than secondary influences. It may be the case that secondary influence can only affect a certain area of a person’s decision-making process. In Joanne’s case, it can be considered that the primary influence is her husband and the secondary influences are her friends and family. Since her husband is a primary influence and he is in favour of taking the vacation, Joanne’s influenced by her husband wiliness to go.   Culture and Subcultural Influences               Culture is the way people look, analyse and understand the things around them. They give meaning to their environment and the people in it as well as the events that transpire based on their cultural background. This means that culture affects consumer behaviour directly. This section of the paper will be discussing the role of culture in consumer behaviour. The discussion will be used to determine how has culture contributed in Joanne’s decision to go on vacation.               There are two kinds of consumption – sacred and profane. Sacred consumption pertains to objects that are apart from everyday objects as such they are treated with respect. On the other hand, profane consumption involves ordinary or everyday objects ( 2000). Therefore, they are not treated as special as sacred ones. However, it is the case that sacred objects can be transformed to profane objects or profane objects can be turned into sacred objects.               This reversal of attributes can happen through three. First, there is desacralization. This means that a sacred symbol has been displaced from its special attributes. This can happen when a famous painting is massed produced and sold to tourists ( 2000). Another process is sacrilization. This is the reversed process of desacralization where profane objects are attributed sacred meanings. This usually occurs with the formation of fandome such as that of Elvis Presley.               In the case of Joanne’s decision to go on vacation, sacrilization occurred. This is the case since her hometown used to be a profane destination since she lived there. However, as time goes by, she got lesser and lesser chances of visiting the place and thus experiences in that place no longer occur on a daily basis. In addition, the thought of her deceased father lingers every time she thinks of her hometown.   This indicates that Joanne’s decision to go on vacation was influenced by the length of time that she was not able to visit the place. She is longing to go back to the things used to be when she lived close to her family and friends as well as the times when her father was still alive. All in all she wants to share the joys of reminiscing with the new man in her life – her husband.   Conclusion               In conclusion, the decision Joanne made about going on vacation is not merely due to the spare money that they have. I t may seem as the most obvious factors for the vacation. However, as the probing got deeper and deeper, it became apparent that a number of factors directly or indirectly influence Joanne. It is also the influences go to work in both the conscious and subconscious level.               There is more to making a product or service more attractive to consumer than just price wars. It is important to note how people perceive the product or service’s impact on their lives. Consumers want what is best for them. This means that products and services must appeal to consumers and present themselves in such a way that people will be able to see themselves actually using the products or services and loving them.   Reference

CONSUMER BEHAVIOR WRITTEN REPORT

To travel or not to travel?: a look at the consumer behaviour in travel and tourism Introduction “A hundred miles of trav...

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